\u3000\u3 China Vanke Co.Ltd(000002) 777 Sichuan Jiuyuan Yinhai Software Co.Ltd(002777) )
[key points of investment]
The company is deeply engaged in smart people’s livelihood and focuses on three major businesses: medical insurance, digital government and smart city. The controlling shareholder of the company is China Academy of physics, which has a leading market share in the field of people’s livelihood informatization. The company has stable business performance and good growth. From 2016 to 2021, the CAGR of the company’s operating revenue and net profit were 25.44% and 29.68% respectively, the gross profit margin basically remained at about 45%, the proportion of the company’s R & D investment increased steadily to 16%, and continued to promote the “medical insurance +” strategy.
The reform of medical insurance fee control has attracted new demand. Policy is an important factor to promote the development of China’s Medical IT system. In the 14th five year plan, inclusive people’s livelihood has become the core of medical information construction. In addition, the outbreak of covid-19 epidemic may also accelerate the development of the industry. For example, the occurrence of SARS in 2003 promoted the construction of the medical and health system from 2003 to 2004, the special reporting system of SARS and other related construction. Medical insurance cost control drives the construction of medical insurance informatization, which is complementary to medical informatization. The purpose of medical insurance fee control is to realize the control of medical insurance expenditure through information-based technical means, so as to improve efficiency and improve the quality of medical service. We expect that the reform of DRG / Dip payment method will bring an increase of more than 10 billion in information system construction in three years.
The medical insurance it market still maintains a rapid growth rate, but there are many players and the pattern is scattered. According to IDC, the compound annual growth rate of medical insurance it from 2018 to 2023 is 20.4%. The company has great advantages in handling management system represented by basic information management and remote medical treatment management system. The company’s contract liabilities are at a high level and orders are relatively abundant. This year, it has won the bid for a billion yuan project.
Digital government and smart city are important components of digital economy. Driven by relevant policies during the 14th Five Year Plan period, China’s government informatization and digitization are in the stage of comprehensive improvement. Taking people’s livelihood guarantee as the starting point and foothold of unblocking China’s great cycle, human resources and social informatization is facing new development opportunities. The company covers the whole field of human resources and social informatization, and its market share in core business continues to increase.
[investment suggestions]
The company has been deeply engaged in the field of smart people’s livelihood for more than 20 years, providing people’s livelihood services for 29 provinces, 228 cities, 160000 medical and pharmaceutical institutions and 700 million public. In the medical insurance, human resources and social security, housing provident fund, civil affairs and other information fields, the market share is in the leading position in the industry. The company’s finance is sound, and its revenue and net profit have continued to grow since its listing. For the future growth, we believe that there are two points worth focusing on. First, medical insurance cost control drives the construction of medical insurance informatization. The company proved its market competitiveness in the bidding of Medical Insurance Bureau in 2019, and is gradually expanding its market share in the field of medical insurance informatization. Second, the construction of digital government and smart city has entered the stage of comprehensive improvement, and the company has fully covered the field of human resources and social informatization. To sum up, it is estimated that the operating revenue of the company from 2022 to 2024 will be RMB 1.583, 1.912 and 2.278 billion, the net profit attributable to the parent company will be RMB 273, 351 and 436 million, the EPS will be RMB 0.87, 1.12 and 1.39, and the corresponding PE will be 19.58, 15.24 and 12.28 times. The market share of the company in the field of people’s livelihood informatization is in the leading position in the industry. It has obvious competitive advantages in the field of medical insurance it. It is optimistic about the national expansion of the company, the growth of orders is expected to accelerate, and the proportion of software revenue will be further increased. Give the company 30 times PE in 2022, corresponding to the 6-month target price of 26.00 yuan, re cover and give a “buy” rating.
[risk tips]
Policy promotion is less than expected;
Information construction is not as expected;
Covid-19 epidemic situation;
Market competition intensifies.
